Drive to monetise - the £3 BILLION autonomous opportunity
The march of technology is relentless, and love it or loathe it, self-driving and autonomous cars move ever closer. The manufacturers who invest, develop and support this seismic shift will reap the biggest rewards.
We still see lots of articles focusing on consumer scepticism of this rapidly evolving technology and yet, behind the scenes, the dice have already been rolled. The automotive industry (and those hoping to break into it), are ploughing billions of dollars into research and development to get us into cars that drive themselves.
Governments are laying the legislative groundwork too. The UK Connected & Automated Mobility strategy, published this year, states that “By 2035, 40% of new cars in the UK could have self-driving capabilities”. This strategy document sees four core benefits: safer roads, improving access to transport, increasing UK productivity and economic growth, and supporting decarbonisation of transport. All of which have to be seen as net positives.
As you’ll probably guess, technological leaps don’t come cheap, but our new research reveals enthusiastic UK and German consumers are willing to spend £3bn on the latest autonomous technology and competing manufacturers are all keen for a slice of the pie.
It’s only natural there’s uncertainty about all this new technology and our data backs this up, with 71% of new car buyers concerned about potential technical failures or malfunctions in self-driving cars (64% in Germany and 78% in the UK). While 61% feel that a loss of active driver control would actually put them off buying a vehicle with autonomous driving technology (55% in Germany and 68% in the UK). Clearly issues remain and these should remind pioneering manufacturers to tread carefully.
In the UK and Germany, our data suggests only 28% would currently be willing to travel in a self-driving vehicle tomorrow. But there still remains a very sizeable part of the market ready and willing to embrace new technology, and more importantly, ready and willing to pay for it.
Our research shows 10% of new car buyers in the UK and 16% in Germany are willing to pay a minimum of £2,500 on top of the cost price of their car for full self-driving capability, with 3% in each market potentially willing to go up to £10,000. That’s £3bn of revenue waiting to be spent on self-driving technology.
Perhaps unsurprisingly, significantly moreunder-45-year-olds (51%) feel comfortable with the idea of self-driving cars being on the road versus just 18% of those over 65. This presents an interesting challenge when you consider the over-65-year-olds represent twice as many new car buyers as the under-45s.
Chris Warren, Senior Director Automotive, comments: “History is littered with examples of consumers showing apprehension towards new technology. Even the necessity for cars to exist at all was questioned, with horses meeting many people's needs. Over time public opinion catches up. Most planes now fly on autopilot for the majority of flights, so it's easy to see a future in which we allow cars to make their own way too.
Whilst the current results highlight how much is at stake for manufacturers financially, beyond this, there is also the opportunity to significantly enhance brand perceptions by being seen to deliver advanced technology earlier than competitors. For now, few manufacturers other than Tesla have talked a lot about autonomy, but we expect that to change markedly in the coming years. This increased exposure will further boost consumer acceptance.
Familiarity tends to breed comfort. Encouragingly, one-third already believe that self-driving cars will be safer than human-operated vehicles, an important step in generating wider uptake".
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